The breakout came, but failed to sustain which may have now formed a false breakout scenario.

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Considering the overall chart structure and derivatives data, technical analysts expect the Nifty to remain in the range of 10,800–11,100 this week. IT and pharma stocks are expected to do well in general, especially top names such as TCS, Tech Mahindra, Biocon and Alembic Pharma, they said.
JAY PUROHITTECHNICAL AND DERIVATIVES ANALYST, CENTRUM BROKING

Where we are: In the first four trading sessions of the week, we saw heavy put writing, but the highest open interest on the call side remained intact at 11,000 call option and the call writers defended their territory well. Due to the absence of follow-up buying, the Nifty trimmed most of its intra-week gains and again slipped below the 10,950 mark on Friday.
What is in store: The recent upmove was supported by a good amount of long build-up in both Nifty and BankNifty and the same are still intact in the system. Technically, the broader chart structure remains positive. But, the short-term picture is not that rosy as the index failed to sustain above the breakout levels and formed a ‘Evening Doji Star’ pattern on the daily chart. This candlestick pattern is a reversal bearish pattern and can be a trigger for a short-term correction. Considering the overall chart structure and the derivative data, we expect the Nifty to remain the range of 10,800–11,100 for coming weeks.
What you could do: At the current juncture, we are not seeing any sign of revival in the mid- and small-cap indices. Therefore, we advise traders to stay light on positions and be very careful in their stock selection. On the index front, a move beyond the 10,800–11,100 levels shall give the clarity about directional trend for coming days. On a close above 11,100, a move towards 11,350–11,400 cannot be ruled out, whereas a sustainable move below 10,800 would dent the bullish sentiments.

Where are we: The start of February has been quite decent as since the day of January F&O expiry, the up move managed to take off the crucial 11,000 levels on the upside. The level of 11,000 was acting as a crucial hurdle since December 2018 and since then the bulls were struggling to cross it. The breakout did come, but it failed to sustain which may have now formed a false breakout scenario.
What is in store: The Nifty is expected to retrace a minimum of 38.2% of the entire rise from 10,004 levels to 11,118.10 levels which comes to 10,692.70 levels which is the short-term target, whereas the medium term target comes to 50% retracement levels i.e. 10,561. On the upside, there is a strong resistance at 11,118.10 levels and till those levels aren’t taken out,

ANAND JAMESCHIEF MARKET STRATEGIST AT GEOJIT FINANCIAL SERVICES

Where we are: Governance issues and scam allegations have clearly upstaged RBI’s rate cut announced last week. In Nifty terms, it meant that the upside breakout beyond the range that had held prices for the past 10 weeks turned out to be a damp squib, having closed back inside the range.

What is in store: Bearish bets are evenly distributed and put activity is following spot prices, as opposed to discrete accumulation seen last week. This suggests that traders are not pricing in the possibility of sharp falls at least for now. While this rules out a sudden drop, the possibility of a steady decline is still there, but this picture should get clearer as the week progresses. Meanwhile, 11,000 region, as a firm resistance is clearer, as has been the case last month as well. The increase in call shorts on last Friday that followed Thursday’s Doji in Nifty, is built up on expectations of weakness in the first part of the week. Pullback from 10,915 may be attempted, but such moves may be fickle. Stronger support is seen at 10,700. Either way, such dips this week should ideally provide a platform for the next swing higher towards 11,400.
What you could do: We favour bull-call spreads or selling puts of Nifty in the second half, with an eye on 10,700 as a stop loss. Among sectors, we would like to have positions on consumption-themed stocks initially, but would like to gradually shift to utilities, OMCs and IT. Gold-themed stocks are expected to show strength on the back of strong performance in the commodity.

The overall bias in the short to medium term remains negative. The daily as well as weekly momentum indicator MACD is well into the buy mode. However, the monthly indicator continues to be in the sell mode which is still a concern for the bulls. .

What could investors do: Defensives like IT and pharma may outperform the Index in the short to medium term. Hence, the investors are advised to concentrate on these two sectors in the short term. From here on, till 11118.10 levels aren’t taken out, the bears will have an upper hand, hence one should avoid high beta names till the resistance of 11,118.10 is not taken out. Among, the IT and Pharma, stocks like TCS, Tech Mahindra, Biocon, Alembic Pharma looks good.